According to a 1986 contract, Newmont Mining must gradually sell a total of 31 percent of its stake to the government or local parties it appoints by 2010.

Of the mandatory divestment 3 percent of stakes must be offered to government in 2006, and 7 percent per year in 2007 through to 2010.

Foreign mining companies in Indonesia are required to divest up to 51 percent of their shares to local parties after five years of commercial production.

But, in the Newmont case it is required to only sell 31 percent of its mandatory divestment because its local partner already holds 20 percent of its stake.

Newmont and the Indonesian government filed for arbitration last year after the Denver-based company did not meet divestment obligations. An arbitration court recently ruled Newmont must sell a 17 percent stake in PT Newmont Nusa Tenggara to the government within 180 days.

The 17 percent stake the arbitration judgement has referred to comprises the amount of stake that NNT had to sell in 2006 (3 percent), 2007 (7 percent), and 2008 (7 percent).

Bambang Setiawan, the director general of mineral, coal and geothermal at the Energy and Mineral Resources Ministry, said the ministry had formed a team to negotiate with Newmont on the price of the shares.

“Next week the team will invite Newmont to present on the share prices.

“Once the prices have been agreed, we will propose that to the finance ministry,” Bambang said.

Newmont had offered the 3 percent stake for 2006 for $106 million, the 7 percent stake for 2007 for $282 million and the 7 percent stake for 2008 for $348 million.

Bambang said the 2006 and 2007 stake (10 percent) would be sold to the regional government of West Sumbawa regency, West Nusa Tenggara.

“The central government is evaluating to buy the 2008 and 2009 stakes,” Bambang said.

On Thursday, NNT said it is working on freeing up its shares from debt-related collateral obligations to clear the way for its planned divestment program. The arbitration ruling also states that the 17 percent stake to be sold to the government must be free from any collateral obligations.

Newmont said last year that all shares in PT NNT had been put up as collateral for a $1 billion loan for Batu Hijau mine development.

Sofyan said, “One thing for sure, the stakes’ status must be clean and clear when we buy it.”